Feb 062014

Massachusetts Minimum Wage Debate

This article was written to the MRA (Massachusets Restaurant Association) by a very concerned Restaurant owner who will remain nameless at this point…13-things-bartender-07-sl

The Massachusetts Senate has passed a bill that will raise the minimum wage to $11.00 per hour evenly over the next two and half years and tie future increases to the North East Region Consumer Price Index. Included in this proposal is a section that will set the tipped wage at fifty percent of minimum wage. The legislation moves onto the House of Representatives. Indications are the House will act on a minimum wage proposal in January or February of 2014.13-things-bartender-07-sl-300x225

$11.00 per hour is too much too fast:

This increase will bring Massachusetts the highest minimum wage in the country.
This will hurt those who you are trying to help the most, teenagers who are learning great employment skills or people who are challenged in some way or another and earn minimum wage.

Restaurant employees are not minimum wage earners:

Our employees earn far above the minimum wage with average hourly wages between $12 – $18/hr.
Our industry provides mother’s hours, second household income opportunities and is the training ground for our work force. Nearly half of all workers have worked in the restaurant industry.

Tying to inflation is dangerous:

Tying to the CPI only adjusts on the uptick; when there is deflation there is no adjustment down; and when subsequent inflation occurs you are only adjusting on total uptick.
The Bureau of Labor Statistics cautions that: “the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index…..”
The Northeast region is comprised of the New England states, New York, New Jersey and Pennsylvania. Indexing the minimum wage to those other states assumes that all areas share similar economic strengths and inflation rates.

An increase in the tipped wage would be crippling to our industry:

Under current law in Massachusetts, tipped employees are guaranteed minimum wage, no matter how high it goes.
Employers must ensure that the cash wage that they are paid and the tips that they claim are at least equal minimum wage. The employer pays all of the contributory taxes, FICA, FUTA, and SUTA on both the cash wage paid and the tips received from patrons.
According to the Bureau of Labor Statistics, Massachusetts tipped employees average $13.13 per hour, which is the highest state average in the country. In 1999 tipped employee wages were $7.14 per hour, a realized increase of 84%!
The system that we have presently is good for the employer due to the labor intensity of our industry, the employee is reporting more in income, has improved purchasing ability that comes with higher wages, and the commonwealth benefits as income taxes are paid on the declared tips.

Restaurants that survived the recession, have reduced costs in every creative way possible

Increased operator prices will have a negative impact on the middle class. Dramatically increased menu prices will be the norm
A one dollar increase in the tipped wage will cost more than $2,000 per tipped employee per establishment

Though they voted to raise the minimum wage which was expected since the ballot question was otherwise a shoe-in, Senate President Murray did not support or offer the tip wage increase. That was worked in by other senators in the floor debate a few weeks later.
The tip wage increase is not a done deal.
We all need to email our reps from where we live and where our businesses are located.
Make one simple email and send it to each rep that represents you and to the reps that represent the address of your business.
Use this easy locator to find them.
Below is speaker DeLeo’s comments in today’s BBJ. We have met with him and quite a few others over the last weeks and months. They are slowly getting it.
This moment you take to write these emails will be worth hundreds of thousands of dollars to you over the next few years. Think of it, your kids college fund, an elderly parents health care costs, your retirement…because that is what is at stake with this wage increase.
Please contact us by calling (508) 303-9905 if you would like to receive the MRA minimum wage tool kit that was sent to MRA members…

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